The Performance Management process is one that is often wrongly dismissed by Organisations, Employees and Managers as being a “paper exercise” and utilises lots of time to no great benefit. This is not the case. The Performance Management process is intended to develop and engage Employees whilst providing honest and objective feedback with regards to Employee performance. When used to its full potential, performance management is an integrated approach to improving Employee performance, both individually and as a team. This in turn elevates the standard of performance of the Organisation as a whole.

Carried out well a performance management process serves a number of purposes and helps to:

Focus on achievement of Organisational objectives through alignment to individual goals;

Facilitate two-way communication between the Manager and the Employee;

Evaluate performance in a transparent and fair manner;

Plan and identify key individual learning and development objectives and enable development of these competencies over time;

Motivate the Employee by setting challenging and stretching assignments;

Reward performance either through pay or some other type of reward.​

A performance rating answers ‘how well the Employee has performed against the agreed goals and objectives during the reference period concerned’. As part of the performance review process, individual performance, including results achieved and competencies demonstrated are rated on a defined scale against the agreed performance goals or objectives. The scale typically involves a descriptor such as ‘Outstanding’, ‘High Performance’, ‘Doing the Job’, ‘Under Performance’, ‘Unacceptable’ and numerical rankings of performance incorporating anything from one (the lowest performance level) to five (highest performance level). In order for performance to be evaluated fairly, the assessment measures utilised should be objective, transparent and applied consistently across the Organisation. The basis upon which Employee performance is measured and the standards by which ‘good’ performance versus ‘poor’ or ‘unacceptable’ performance should also be clearly defined and communicated. A performance rating should be based solely on performance and not be dictated by other factors such as Employee function, role or seniority.

The performance appraisal process should not be viewed as a one off event or stand-alone meeting which must take place once or twice a year. In order to be truly successful, it should be characterised as a process of continuous dialogue between manager and Employee, with formal opportunities for ‘check in’ during the year, in order to evaluate past performance, provide further feedback and agree or revise future priorities.

Appropriate feedback is the fundamental basis for any appraisal meeting. Employees should be given honest, constructive information about their performance to aid development and improvement in performance. Unfortunately, many managers experience difficulty when it comes to giving feedback which an Employee may not want to hear for fear the Employee will react badly to it or it will damage the working relationship. As an Appraiser, feedback should be:

Positive - Try to start and finish on a positive note. It can be helpful for the person receiving the feedback to know what they did well. Feedback is often seen as criticism and we tend to overlook the positive aspects. Identifying the positive will help reinforce constructive behaviour.

Facilitative - Encourage self-criticism. People are more willing to accept feedback when they recognise their own strengths and weaknesses. Start by encouraging them to appraise themselves and then build on their own insights.

Specific - Focus on and deal clearly with particular instances and behaviour rather than make vague or woolly statements. If we give clear, direct, open and concrete feedback it is more likely to be understood.

Descriptive - Use descriptive rather than evaluative terms. By describing your own reaction, it leaves the individual free to change their approach or not.

Actionable - Give direct feedback towards behaviour that the individual can do something about. It can be frustrating to remind them of something over which they have no control.

Prioritised - It is difficult for people to change everything at once. Concentrate on two or three key areas for improvement, preferably those where the individual can see a quick return. If there is a major problem, try breaking it down into smaller, step-by-step goals.

Constructive - Be constructive with your criticism and keep it factual to avoid emotion. In making individuals aware of their shortcomings, do not just criticise but offer suggestions as to what could have been done differently. Try to turn the negative into a positive.

Discussed - Don't give the feedback and run. Stay to explore the topic in more detail. Have they taken it on board? Do they want to discuss future action plans in more detail?

Carried out effectively, performance management is an all-inclusive process bringing together many of the elements that make up successful people management. Learning and development is an integral piece of this process. While review of past performance typically forms a vital piece of the appraisal process, in order to be successful, it should also be used as a basis for reaching agreement on future areas of learning and development.

All in all, successful Performance Management is a vital contribution to the success of an Organisation, and its Employees, and should be treated this way by Appraisers and Appraisees alike.